Which of the following is not a problem associated with monetary policy? A. Monetary policy may be ineffective if investment and consumption fail to respond to changes in interest rates. B. It is difficult to predict interest rates because a number of other factors also affect interest rates. C. There is considerable uncertainty on the value of the money multiplier. D. None of the above.

Question

Queen Bee

Business

24 August, 11:34

Which of the following is not a problem associated with monetary policy? A. Monetary policy may be ineffective if investment and consumption fail to respond to changes in interest rates. B. It is difficult to predict interest rates because a number of other factors also affect interest rates. C. There is considerable uncertainty on the value of the money multiplier. D. None of the above.

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Answers (1)

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Judith French · Answer 1

D. None of the above.

Explanation:

monetary polict affects the interest rates, but the exact intreset rates are difficult to predict due other tfactors affecting the interest rate.

the money multiplier is considerably unstable and at times, the monetary policy can turn out to be ineffectiveif the inverstment adn consumption fail to respond to changes in the interest rates.